RITIKA SHARMA / EMIRATES BUSINESS
UAE recorded a 0.23% increase in GDP due to increased card usage between 2011-2015, says an international study. The study states that increased electronic payment usage added US$3,700,000,000 to the UAE’s GDP during the mentioned period and that like the other notable markets, UAE experienced over a 6 percentage point increase in card usage.
The study conducted by Moody’s Analytics commissioned by Visa also confirm that payment cards aren’t just convenient—they help stimulate growth for economies around the world.
The Middle East had the fewest average jobs added per year (8,000), but this was likely a result of the relatively smaller population than in the other regions. In this context, the study that analyses data from over 70 global countries state that increased electronic payment usage created the equivalent to an average of 14,170 jobs in the UAE per year between 2011 and 2015.
Aiming at analysing the impact of electronic payments on economic growth between 2011 and 2015, the study found that increased use of electronic payment products, including credit, debit and prepaid cards, added US$296B to GDP, while raising household consumption of goods and services by an average of 0.18 percent per year.
In addition, Moody’s economists estimate that the equivalent to 2.6 million new jobs were created on average, annually, over the five-year period as a result of increased use of electronic payments. The 70 countries in the study make up almost 95 percent of global GDP.
“Electronic payments are a major contributor to consumption, increased production, economic growth and employment creation,” noted Mark Zandi, Chief Economist, Moody’s Analytics.
“Those countries which saw large increases in card usage also saw larger contributions to overall growth in their economies.”
Findings from the study were shared in the report, “The Impact of Electronic Payments on Economic Growth,” which also indicated that the electronification of payments benefited governments and contributed to a more stable and open business environment.
Additionally electronic payments helped to minimise what is commonly referred to as the grey economy — economic activity that is often cash-based and goes unreported. As a result, electronic payments provided a higher potential tax revenue base for governments, while also bringing the added benefits of lower cash handling costs, guaranteed payment to merchants and greater financial inclusion for consumers.